Hui pays self-employment tax on her sole proprietorship income, supplemental Medicare surtaxes on excess wages and self-employment income (the .09% tax), and supplemental Medicare taxes on investment income (the 3.8% tax). Which of the following statements is correct regarding the deductibility of these taxes?
A) All three of the taxes are deductible as itemized deductions.
B) One-half of the self-employment tax is deductible for AGI, and the .09% and 3.8% taxes are itemized deductions.
C) None of the taxes are allowed as a deduction.
D) One-half of the self-employment tax is deductible for AGI, but the .09% and 3.8% taxes are not allowed as deductions.
D) One-half of the self-employment tax is deductible for AGI, but the .09% and 3.8% taxes are not allowed as deductions.
The two supplemental Medicare taxes are not deductible at all, but one-half of the self-employment tax is allowed as a deduction for AGI.
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